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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: pls418 who wrote (12258)	2/6/2002 11:10:45 AM
From: Wowzer	Read Replies (2) \| Respond to of 23153

Got a few problems with WCOM, first would be the ethics of the WCOM's board. Bernie Ebbers borrowed heavily to buy WCOM stock, this loan was guaranteed by WCOM. So if everything goes to hell WCOM is stuck paying the debt of Ebbers which is total bullshit in my opinion. Who in their right mind would approve a deal like this? They already pay him 11 million a year, plus a ton of stock options you think that would be enough. To me that relationship should be criminal and does not provide a benefit to anybody other then a personal casino for Ebber. When I found out about this deal I dumped the shares that I held a few points ago. This type of deal hasn't been done once but twice for him! That said who the hell knows what type of accounting games they are playing. The other problem is that they rely heavily on debt to fund operations and the credit market is quickly drying up for WCOM (I guess they don't like lending money to fund Ebber's gambling habit either) which could cause a severe liquidity crunch or force them to pay significantly higher rates then they do now. And last but not least the market absolutely hates them. Given the above I think they have a 80% chance of filing BK soon.

To: pls418 who wrote (12258)	2/6/2002 12:41:26 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 23153

WCOM: GAMBLER'S ANONYMOUS Hi pls418, One of the first things I look at when considering a publicly traded company is the quality of management. At LDDI, now WCOM, we have a Canadian evangelical who landed in Mississippi in order to feel more comfortable with a motel investment that morphed into a sharp elbowed price gouging PX, or private exchange that did big numbers by ripping off travelers for telephony services. The religious angle hasn't gone away, but the profits sure have. Well, now, you got this fella Ebbers running the show. And as it turns out, he's apparently got a gambling problem. December of 2000, poor Bernie got some margin calls on a raft of really dumb bets he placed on pip squeek illusional tech stock wannabees. Courageously, his board of directors stepped up to the plate. They floated a loan to Bernie, and made some really nifty stock options available to him. Priced right. So, what has Bernie done for you recently? Well, looks like he decided that since he could be made whole by his pals on his board, that he ought to roll the dice again. Which he did with another round of margin bets. (This is, of course, called moral hazard. A world of heads I win, tails I win for Bernie, and the opposite for you.) Ooops, too bad, WCOM shares slipped below the level that the CEO felt the market would get to, and guess what? Margin calls. Rumor has it, to the tune of, oh, in the neighborhood of $180 Million. But, fear not, dear investor, for the company has once again shown how wonderfully generous and caring it is. Yup, they made Bernie whole again. Now this is really special, but I ask you, gentle reader, is this the sort of hard charging, wise decision making, viable leadership for a fella like you to invest your hard earned dollars in, or are you a little leery that the money you put into LDDI may be simply a charitable contribution to a fellow who is on a losing streak? -Ray